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29 Dec 2014
China financials surge after PBoC injects more liquidity – TradeTheNews
FXStreet (Barcelona) - The TradeTheNews Team shares that China financials trade higher after the PBoC confirmed injecting more liquidity with loan-to-deposit rule revision, further noting that China industrial profits saw the largest decline in 27months by falling 4.2% in November.
Key Quotes
“China financials are trading sharply higher after a PBoC report over the weekend confirmed the govt would be changing the rules on loan-to-deposit ratio calculations effective 2015 to inject further liquidity into the system. The new rules allow the inclusion of savings held by banks for non-deposit-taking financial institutions in banks' deposits, expanding the ratios and boosting lending capacity.”
“In the energy sector, PetroChina was up 5% and other related names were bid higher after China Finance Ministry announced it would raise petroleum windfall tax threshold to $65/brl from Jan 1st.”
“China industrial profits for November marked the most notable economic data point, falling by 4.2% - the largest y/y decline in 27 months. YTD, profit growth slowed to 5.3% from 6.7%, as coal mining sector profitability shrank 44% and Oil/Gas industry by 13%.”
“Separately, comments attributed to China Commerce Minister Gao indicated 2015 foreign trade growth would slow to 6.0% from 7.5% official target in 2014. Ministry of Commerce also briefly published and then pulled a website report that 2014 trade growth would be just 3.5%, ensuring a miss on the official 7.5% GDP target.”
Key Quotes
“China financials are trading sharply higher after a PBoC report over the weekend confirmed the govt would be changing the rules on loan-to-deposit ratio calculations effective 2015 to inject further liquidity into the system. The new rules allow the inclusion of savings held by banks for non-deposit-taking financial institutions in banks' deposits, expanding the ratios and boosting lending capacity.”
“In the energy sector, PetroChina was up 5% and other related names were bid higher after China Finance Ministry announced it would raise petroleum windfall tax threshold to $65/brl from Jan 1st.”
“China industrial profits for November marked the most notable economic data point, falling by 4.2% - the largest y/y decline in 27 months. YTD, profit growth slowed to 5.3% from 6.7%, as coal mining sector profitability shrank 44% and Oil/Gas industry by 13%.”
“Separately, comments attributed to China Commerce Minister Gao indicated 2015 foreign trade growth would slow to 6.0% from 7.5% official target in 2014. Ministry of Commerce also briefly published and then pulled a website report that 2014 trade growth would be just 3.5%, ensuring a miss on the official 7.5% GDP target.”